10 January 2007

California Governor Arnold Schwarzenegger is establishing by Executive Order a Low Carbon Fuel Standard (LCFS) that requires, as an initial goal, a 10% reduction in the greenhouse gas emissions (GHG) intensity of all passenger vehicle fuels sold in California by 2020.

The LCFS requires fuel providers—refiners, importers, and blenders of passenger vehicle fuels—to ensure that the mix of fuel they sell into the California market meets, on average, a declining standard for GHG emissions measured in CO2-equivalent gram per British Thermal Unit (BTU). All relevant greenhouse gases will be included (i.e., CO2, CH4, and N2O) and be measured on a full fuel cycle basis (i.e., upstream feedstock extraction, fuel refining, and transport to market).

The LCFS is the world’s first fuel standard targeted specifically at the quantified reduction of greenhouse gas emissions, measured on a full lifecycle basis.

Transportation accounts for forty percent of California’s annual greenhouse gas emissions, and we rely on petroleum-based fuels for an overwhelming 96 percent of our transportation needs. This petroleum dependency contributes to climate change and leaves workers, businesses and consumers vulnerable to price shocks from an unstable global energy market. As a world leader in energy efficiency, alternative energy and reducing greenhouse gases, California’s new low carbon standard is an innovative action that will diversify our fuel supplies and establish a vibrant market for cleaner-burning fuels.

—Governor Schwarzenegger

This is expected to replace 20% of on-road gasoline consumption with lower-carbon fuels, more than triple the size of the state’s renewable fuels market, and place more than 7 million alternative fuel or hybrid vehicles on California’s roads (20 times more than on the California roads today).

The LCFS will use market-based mechanisms that allow providers to choose how they reduce emissions while responding to consumer demand. For example, providers may purchase and blend more lower-carbon ethanol (e.g., cellulosic ethanol rather than corn ethanol) into gasoline products, purchase credits from electric utilities supplying low-carbon electrons to electric passenger vehicles, diversify into low-carbon hydrogen as a product and more, including new strategies yet to be developed.

A white paper issued in support of the LCFS by the Governor’s office notes that to achieve a 10% reduction in carbon intensity, fuel providers will need to reduce the carbon intensity associated with their fuels from about 97.4 kg of CO2-eq/MMBTU to 87.7 kg/MMBTU.

While at this time we believe the most likely strategies are E10, E85, switching to cellulosic ethanol, plug-in hybrids, and hydrogen fuel cells, markets will determine whether that mix or others (including options such as biobutanol or biocrude) will be employed to meet the standard.

Large-scale use of lower-carbon transportation fuels is necessary to meet the AB32 requirement that GHGs generated in the state be reduced to 1990 levels by 2020. A 10% reduction in the carbon intensity of transportation fuels will contribute 13.4 million metric tons of CO2 reductions, more than half of the 24 million metric tons of CO2 reductions needed to return passenger vehicles and light trucks to 1990 levels.

The Governor’s Executive Order directs the Secretary for Environmental Protection to coordinate the actions of the California Energy Commission (CEC), the California Air Resources Board (ARB), the University of California and other agencies to develop the protocols for measuring the “life-cycle carbon intensity” of transportation fuels. This analysis will become part of the State Implementation Plan for alternative fuels as required by AB 1007 (Pavley, Chapter 371, 2005) and will be submitted to the California Air Resources Board for consideration as an early action item under AB 32.

The ARB will complete its review of the LCFS protocols for adoption as an early action no later than June, 2007. Upon adoption as an early action by the ARB, the regulatory process at ARB will begin to put the new standard into effect. It is expected that the regulatory process at ARB to implement the new standard will be completed no later than December, 2008.

The University of California estimates that the Governor’s greenhouse gas (GHG) emissions goals can increase Gross State Product by about $60 billion and create more than 20,000 new jobs.

Possible Low Carbon Fuel Strategies

Strategy

Description

E10 (10% ethanol, 90% gasoline by volume)

Increase blending of ethanol from today’s 5.7
percent by volume to 10 percent.

Comments

California needs to spend some serious dough on public transportation, both local and in connecting the cities. For the love of God make it easier to not drive in LA. Make it unusual to fly or drive between major cities like SF, LA, SD, Sacramento, San Jose, and Bakersfield.

It would have a significant impact on GHG reduction while also help to avoid highway expansion due to growth.

So, if the oil companies don't sue to prevent this, it looks like alot more biodiesel(very low carbon footprint)will be sold to displace dino-diesel(very high carbon footprint)in California.
WAY TO GO GOVERNATOR!!!

Stormy: Precisely. But it all boils down to changing the pattern of development. The wasteful California sprawl development paradigm has been based on cheap gasoline and subsidized highways. Somehow future development needs to be made smarter, denser, and more transit friendly. Futzing around at the margins by improving mileage, alt fuels, etc. ain't gonna mean much as the population continues to boom--the improvements in GHG emissions per vehicle will be swamped by the increase in the number of miles driven, hours spent stalled in traffic, etc.

But even stalled in traffic, the commute by car to work is often much shorter than taking any form of mass transit. A lot of people actually commute suburb-to-suburb these days rather than into city centers, which complicates any mass transit expansion plans even more.

Nick,
Denser, yes, but keep it 15-20 stories, due to earthquakes. It is feasible to make 45 story structures take a 8.5, but it would be expensive. You could build 3 16 story structures, w/much more floor space, w/same or better seismic rating, for the same cost.

Cervus: Agreed; the existing legacy of sprawl infrastructure presents a conundrum: how to engineer for energy efficiency after the fact?

Allen: Yes. Dense doesn't mean skyscrapers, necessarily. Dense can be low-rise corridors with greenbelts. Transit/bicycle/walking-friendly is what we need. Considering the climate in most of the state, people could walk/bike to work in the open air most of the time, if development allowed. Instead they are inching along the clogged freeway, breathing fumes.

I would love to see the GHG emissions for hydrogen on a complete basis (extraction, refining, production, purification, storage, transport) as proposed. I rather suspect hydrogen is set for a fall from grace.

Also good to see: no mention of nuclear (nucular, if you know what I mean).

As they say down here in CA: My governor can kick your governor's ass!

We can not even get people to work where they live or live where they work. The houses cost less outside the cities, so they live there, but the companies want to be in the cities so that is where the jobs are. Once you get the companies to locate in the suburbs or get affordable housing in the cities, then you can cut down the miles driven. This should have been done decades ago and if it were easy to do it probably would have been done.

I'm surprised to read the favorable comments here. This is just another ethanol boondoggle. Look at the list of technologies they give: ethanol, ethanol, ethanol, PUH, and fuel cells. We all know the last one is a non-starter and PUH's are years away. Those technologies are just cosmetic distractions to dress things up and make us forget that the real story here is all ethanol all the time.

And yet most objective analyses show that ethanol doesn't make economic sense (you can't make it at a price people are willing to pay), doesn't make energy sense (barely break even at best in terms of fossil fuel use), and doesn't make sense as a greenhouse gas reduction (massive effort for a marginal reduction at best, and studies massively disagree about the degree of that reduction or whether it happens at all).

You cannot mandate that people will buy X percentage of a certain type of vehicle. The market just doesn't work that way.

Hal:

I'd add to your complaint that the state of California has to import all of its ethanol from out of state sources anyway. However, the article does include biobutanol and biocrude (with algae, perhaps?) as other potential sources. I'm happy to see these mentioned. However, they're still in the up-and-coming category.

Ethanol has a leg up simply because we already produce so much of it, despite its very dubious benefits.

Did you miss the low carbon electron part?Electric vehicles?This is a republicrat attempt at merging regulation and market principles.I think it is the most forward movement by a politician that has a prayer of accomplishing anything.
The low carbon electron deal seems to be influenced by plug in parners.This could provide a market which could pull electric utilities in to the auto fuels market.Perhaps they could get clean air credits by subsidizing li-ion batteries then sell the electricity to go in them.I know they were discussing creative ideas something like what I described.it could provide a takeoff point.In cluding other fuels helps avoid political infighting and keeps door open to future advances in thoe technologies.I kinda like the republicrat approach.

The governator is definately streets ahead of the Federal Government. If you want to complain about all ethanol, all the time, go after Congress, Hal.

This has the potential to encourage any technology that can prove its worth. Add to that the fact that it is proposed to take an overall view (full fuel cycle basis).

So, even if the policians are expecting ethanol to be the winner, at least they have created a fairly honest system, that will allow any fuel to dominate the market. If only Congress could be this wise...

I live in California and have observed this guy for a while. Take a closer look at what he says, don't think you know what he means. This is the guy with 7 Hummers that promoted the Hydrogen Highway before the last convention. It is the same with his health care announcement. You can almost be sure there is a lot under there waiting for his rich Republican business friends.

Reducing California's CO2 footprint is a laudable goal, but incremental improvements in fuel quality will be swamped by increases in total fuel consumption, even on a per-head basis.

If the governator were really serious about CO2 - as opposed to endorsing specific technologies - he would focus on cutting demand for fossil fuel to begin with:

o regulations to increase urban density
o toll roads / congestion charges
o VLF surcharges for low-MPG light-duty vehicles
o integrated rail, bus and taxi services
o bicycle paths + tax credit for purchase of electrically assisted bicycle(s) when number of motor vehicles registered to members of a family or a business is voluntarily reduced by one for at least 24 months (incl. vehicles registered out-of-state)
o carbon tax on jet fuel
o phasing out avgas in favor of diesel for rec. aviation

o tax credits for home insulation / furnace upgrade projects
o mandatory combined heat, power and air conditioning (via small-scale absorption chillers) for greenfield commercial and residential developments
o tax credits for solar panels and electrically powered heat pumps / airco for new realty for which CHPAC is not cost-effective

o increased cost of electricity derived from fossil fuels, to fund the construction of solar power plants and their close co-operation with existing, fully amortized hydroelectric dams

o requirement to reduce materials used for product packaging
o requirement to charge for single-use grocery bags to encourage the use of durable ones

I could go on, but you get the picture. Western Europeans consume about half as much fossil fuel per unit of GDP as Americans do. There's plenty of room for conservation with little or no impact on quality of life before you shell out big bucks for fancy hi-tech solutions.

Also good to see: no mention of nuclear (nucular, if you know what I mean).

Assuming we are concerned about global warming, why would no nuclear be good? There is a large nuke plant not too far from my house. It spins out a gigawatt all day long and produces no particulates, no acid formers, and no CO2. It's quiet too. I like it. If someone tried to replace it with a coal plant, I would be mad as hell. If we used intelligent modular designs (and well meaning but uninformed people... got informed), nukes wouldn't cost so much to build.

gimme a break, nothing is ever negotiable for Bush. Remember, he's the Decider! Perhaps you should ask someone who has a family member serving in Iraq just how wonderful their quality of life is right now.

They do this because they can not legislate CAFE. The Feds will not allow them to set fuel economy standards. They can not say 1 in 10 oil tankers will not dock at these shores. The states are resorting to CO2 because the EPA claims that they do not have the authority to under the Clean Air Act. As soon as that is cleared up and the EPA is in charge of CO2, administrations like this one will do nothing again and wait for legal actions.